According to press reports, the trading error happened during a technology upgrade that went catastrophically wrong.

The system, called a "trading axis", monitors the Wall Street bank's inventory to determine whether it should be a more aggressive buyer or seller in the market.

But a technical error misinterpreted non-binding indications of interest, or IOIs, as firm bids and offers, leading to some trades that were vastly out of line with where market prices were, Reuters reported previously, citing a source familiar with the matter.

Of course in the event of a major systems failure someone should be held accountable and responsibility must start and end somewhere. In order to trade in a super-fast and global marketplace, CIOs and their teams must be able to deliver on the bare minimum of operation standards. But it’s hard to recall where a major systems snafu resulted in an immediate disciplinary action.

While this may seem like a prudent maneuver, Goldman Sachs’ move begs a few questions, such as:

- Why stop at four IT workers? Why not discipline the board of directors and other executives who have kept Goldman Sachs’ IT budget on a tight leash?

- Can Goldman Sachs fire the person who approved a series of IT layoffs since 2008?

- Are any consultants or third-party vendors vulnerable to dismissal, as well?

- Why was this upgrade performed on a Tuesday and not ever the weekend? Was it even tested?

- In this Summer of Glitches, have we entered an era when financial firms finally realize that their legacy systems are not up to the job?

Placing a quartet of IT professionals on leave might make the suits at Goldman Sachs feel good for now but problems exist. After all, this is a respected and reviled firm with a reputation to maintain - just check out this on-the-nose satire from The Onion - but this seems like overkill. In fact, suspending four IT worker bees may do little to motivate the IT staff except make them fear for their jobs. It may help them to concentrate in the short run but it may also make them sloppy and too frightened to innovate in the long run. Also, the issue of balance comes into play.

After all, was anyone fired when Goldman Sachs was forced to take a government bailout in 2008?

Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio

re: Did Goldman Sachs Really Have to Discipline 4 IT Workers After Its Glitch?

It does set a dangerous example, if IT workers are fired/suspended when there are mistakes. Unless it was a clear cut case of the workers not following the rules or disobeying directives from their boss, then it could set a bad tone for the entire IT shop. That said, there has to be some sort of accountability, right?

re: Did Goldman Sachs Really Have to Discipline 4 IT Workers After Its Glitch?

And guess what, their old former programmer/software engineer is still looking for work, maybe they should bring Sergey back:) I'm with you though on these issues as I used to program and there's of things to look at and sometimes everything is done perfectly and there's still issues that happen and the rest of the world is going to have to used to that. We now have yet another case of "stolen code" and I think they should model and run what they found on the guys' computer to see if he really did anything since the case says they found some of the same code that was exchanged via Drop Box.

The evil Drop Box code snatcher...I find it hard to believe also that the folks providing the code in Drop box, traders, would even have the self knowledge to know what to put in there for their buddy at MIT.

I'm with you though, tell a true story and again quit automatically making the IT folks the automatic bad guys with making a mistake until it can be proven that was the case. I think Goldman might really miss old Sergey about now:)

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